Steinke v. Safeguard World International LLC

Plaintiff
Stuart Steinke worked as a Regional Sales Manager for
Defendant SafeGuard World International LLC (SafeGaurd) from
October 2014 until he was terminated in February 2016. The
offer letter SafeGaurd sent to Steinke stated that, in
addition to his $105, 000 annual salary, Steinke would
“be paid a guaranteed commission of $1, 500 each month
for [his] first full 5 months.” After 6 months, Steinke
would “be expected to start repaying 50% of [his]
commission back to the company at a minimum rate of $500 per
month, ” regardless of whether Steinke was actually
earning commissions after that point. Further, the offer
letter explained that “commissions will be paid on the
first years sales order value commensurate with the [2014
fiscal year] Sales Incentive Plan[.]” Steinke alleges
that he made approximately $3.2 million in qualifying sales
over the course of his employment, and that SafeGuard still
owes him approximately $60, 000 in unpaid commissions.

At
issue is SafeGuard's Motion to Dismiss Steinke's
Second Amended Complaint, which asserts claims for breach of
contract and violations of Arizona wage laws. (Doc. 32.) The
motion is fully briefed and neither party requested oral
argument. For the following reasons, the motion is denied.

I.
Legal Standard

When
analyzing a complaint for failure to state a claim to relief
under Rule 12(b)(6), the well-pled factual allegations are
taken as true and construed in the light most favorable to
the nonmoving party. Cousins v. Lockyer, 568 F.3d
1063, 1067 (9th Cir. 2009). Legal conclusions couched as
factual allegations are not entitled to the assumption of
truth, Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009),
and therefore are insufficient to defeat a motion to dismiss
for failure to state a claim, In re Cutera Sec.
Litig., 610 F.3d 1103, 1108 (9th Cir. 2010). To avoid
dismissal, the complaint must plead sufficient facts to state
a claim to relief that is plausible on its face. Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This
plausibility standard “is not akin to a
‘probability requirement, ' but it asks for more
than a sheer possibility that a defendant has acted
unlawfully.” Iqbal, 556 U.S. at 678 (quoting
Twombly, 550 U.S. at 556).

II.
Discussion

SafeGuard
contends that Steinke has not sufficiently alleged a breach
of contract claim. Although SafeGuard does not discuss
Steinke's statutory claim, it nonetheless requests
complete rather than partial dismissal. The Court understands
SafeGuard's position to be that Steinke cannot plausibly
allege a violation of wage payment laws if he cannot also
plausibly allege that he is owed unpaid commissions under his
breach of contract claim. Accordingly, the Court will limit
it discussion to Steinke's breach of contact allegations.

To
state a plausible breach of contract claim, a plaintiff must
allege (1) the existence of a contract, (2) a breach of that
contract, and (3) resulting damages. Thunderbird
Metallurgical, Inc. v. Ariz. Testing Labs., 423 P.2d
124, 126 (Ariz.Ct.App. 1967). Steinke has adequately alleged
each of these elements.

First,
Steinke alleges that the signed offer letter, the 2014 Sales
Incentive Plan, and the parties' course of conduct under
those instruments collectively constitute the relevant
contract governing his entitlement to commissions. SafeGuard
argues that Steinke's claim should be dismissed because
his allegations require the Court to speculate about the
terms in the contract. The Court disagrees. Steinke attached
to his Second Amended Complaint both the terms of the 2014
Sales Incentive Program and the offer letter. The Court need
not speculate about the terms contained in these documents.
Although the offer letter only details the 2014 incentive
figures, it alludes to the possibility of commissions during
the following year. Steinke also alleges that SafeGuard
continued paying him commissions after December 31, 2014,
indicating that the offer letter did not limit commissions to
the 2014 fiscal year. Taken together, Steinke as plausibly
alleged the existence of a contract to pay commissions beyond
2014.

Second,
Steinke alleges that SafeGuard breached this contract by
failing to pay him commissions on qualifying sales. SafeGuard
contends that Steinke has not sufficiently alleged a breach
of contract because he does not detail how and why his sales
were made in accordance with the Sales Incentive Plan. The
Court disagrees.

Steinke
specifies that he grossed approximately $3.2 million in sales
that “met the eligibility requirements of the Sales
Incentive Program” and “went ‘live' per
the Sales Incentive Program” prior to his termination.
At the pleading stage, Steinke is not required to allege
“detailed factual allegations” to state a
plausible claim to relief. Twombly, 550 U.S. at 555.
Steinke has no obligation to identify each and every sale he
made while employed, nor is he required to mimic the exact
language of the contract or use magic words to describe his
sales. SafeGuard is in a better position to obtain its own
sales and payroll records, and Steinke has provided
sufficient information for SafeGuard to reasonably prepare a
response.

Finally,
Steinke alleges that he suffered approximately $60, 000 in
damages due to SafeGuard's breach, and that he is
entitled to treble this amount under Arizona's wage laws.
Accordingly, taking the well-pled facts as true and
construing them in the light most favorable to Steinke, ...

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